The long-running dearth of IPOs could finally be nearing its end, thanks in part to Reddit’s highly anticipated public debut.
“It turns out that the endless reams of text and memes that Reddit’s myriad users generate every day is digital gold for the forum giant,”
Expected to list this month, Reddit has seen a significant increase in valuation during the pandemic. And as the company prepares for its public offering, it is determined to maintain its high private-market price.
Despite its massive revenue of over $800 million last year, Reddit has yet to turn a profit. But in the eyes of investors, the potential for growth is often more enticing than current profitability. And in that regard, Reddit has a strong advantage. Its vast user-generated content is a treasure trove for AI companies in need of data to train their models.
“As long as AI companies need data to train their models, Reddit’s sheer size and user-generated content make it a valuable asset,”
If Reddit’s IPO is successful, it could potentially open the public-offering window wider than we’ve seen in recent quarters. However, there is always the risk that the public offering could go sour, just like an unpopular opinion downvoted to oblivion on the site.
But with a growth story that is highly appealing to AI companies, Reddit may have chosen the perfect time to enter the public markets.
